http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 8  

PETITIONER: KEDAR NATH LAL & ANR.

       Vs.

RESPONDENT: GANESH RAM & ORS.

DATE OF JUDGMENT: 05/09/1969

BENCH: HIDAYATULLAH, M. (CJ) BENCH: HIDAYATULLAH, M. (CJ) SHELAT, J.M. VAIDYIALINGAM, C.A.

CITATION:  1970 AIR 1717            1970 SCR  (2) 204  1969 SCC  (3) 787  CITATOR INFO :  R          1973 SC 569  (16,36)  RF         1978 SC1217  (15)

ACT:  Transfer  of Property Act (4 of 1882), s. 52---Doctrine  if lis pendens-Applicability  Release   by   Cooperative   Society   of   properly   from mortgage--Effect of.

HEADNOTE:  One  R executed a mortgage of his share in two survey  Nos. to  a Cooperative Society.  On his application and in  order to  enable  him  to repay a sum of Rs.  500/-,  the  Society released  the property in 1933, but R never paid the  amount to  the  Society.  The Society filed an  application  for  a mortgage award on April 5, 1934 and the Assistant  Registrar made  an  award in the nature of a  preliminary  decree,  on December  16, 1934. Thereafter a final mortgage  decree  was passed  by the Assistant Registrar and the two  survey  nos. were  brought  to  sale and purchased by  the.  Society  and possession was obtained on July 20, 1937.  Meanwhile, one  D obtained attachment before judgment of the two survey  nos., as the property of R, in a suit for money against R, and, in execution  of  the money  decree, purchased the  two  survey nos.  on  August 13, 1934.  In 1943, the Society  went  into liquidation  and the liquidator sold the properties  of  the Society  and the appellant bought the two. survey  nos.   He filed  a suit for a declaration of his title and  possession of  the  properties  in the two, survey  nos.  from  various persons who were in possession of the properties under R and D.  The High Court dismissed the .suit. In appeal to this Court,     HELD:  (1)  The motive of the release, in 1933,  of  the properties by the Society in favour of R was the payment  of Rs. 500/- by R to the Society, but it was not a condition Of the  release.   Therefore, the release was  binding  on  the Society. [209 D--E]     (2)  But R did not object to the inclusion of the  items in  the  mortgage award.  Therefore, the Society  must  have bona fide felt that the properties remained encumbered. [211

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 8  

G]     (3)  The  proceedings in respect of  the  mortgage  were pending   from  April  5,  1934  to  July  20,  1937.    The proceedings  were for obtaining a mortgage award  equivalent to  a mortgage decree and not for a money decree.  The  fact that they were attached before judgment in D’s suit does not affect  the  application  of the doctrine  of  lis  pendens. Attachment  is only effective in preventing  alienation  and does not create title to property. If in fact, the  property was.  acquired pendente lite, the acquirer is bound  by  the decree  ultimately  obtained.  Therefore,  D’s  purchase  on August 13, 1934, was hit by the. doctrine. of lis pendens in s.  52  of the Transfer of Property Act,  1882.   Since  D’s purchase was hit by the doctrine the properties continued to be  those  of  the  Society and  hence,  the  appellant  was entitled to them. [210 E, G--H; 211 A--C] 205     Samarendra  Nath  Sinha & Anr. v.  Krishna  Kumar   Nag, [1967]  2 S.C.R. 18, followed.     Moti  Lal v. Karrab-ul-Din & Ors. 24 I.A. 170 and  Gouri Dutt  Maharaj  v.  Sukur  Mohammed and  Ors.  75  I.A.  165, applied.

JUDGMENT: CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos.  1091-1103 of 1964.     Appeals  from  the judgment and decree dated  April  17, 1957 of the Patna High Court In Second Appeals Nos. 1447  of 1950 etc.     C.B.  Agarwala and D. Goburdhun, for the  appellant  (in all the appeals).     U.P.  Singh and K.C. Dua, for respondents Nos. 3  and  4 (in  C.A.  No. 1091 of 1964) respondent No. 3 (in  C.A.  No. 1092  of 1964) respondent No. 4 (in C.A. No. 1093 of  1964), respondent No. 7 (in C.A. No.. 1094 of 1964), respondent No. 3  (in C.A. No. 1096 of 1964) respondents Nos. 4 and  5  (in C.A.  No. 1095 of 1964) and respondent No. 4 (in C.As.  Nos. 1099, 1100 and 1101 of 1964). The Judgment of the Court was delivered by     Hidayatullah, C.J.  These are 13 appeals by  certificate against  the  common judgment in second  appeal,  April  17, 1957,  of the High Court of Patna.  The appellants  are  the original plaintiffs. The appellants had filed 12 title suits for  ejectment in the court of the Second Munsif  at  Buxar. Eleven   suits  were  dismissed.   It  was  held  that   the plaintiffs  had  no  title  to suit  lands.   One  suit  was compromised  and  decreed in terms of  the  compromise.  Two other suits--one by Kedar Nath (one of the plaintiffs in the 12 title suits) and the other by one Udholal  were filed for rent for 1335-1337 Fasli in respect of some lands  comprised in  Survey  No. 3385 of Mouza Buxar against the  tenant  Ram Chhabi  Lal. The two rent suits were heard together.   Kedar Nath was held to be the landlord and not Udholal.  The  suit of the former was decreed and that of the latter  dismissed. On  appeals  filed  by Udholal the  decision  was  reversed. Appeals  by Kedar Nath to the High Court were  dismissed  on the ground that in the title suits from which eleven appeals were  filed  it  was held by the High  Court  affirming  the decision  of the courts below that Kedar Nath had no  title. Since  the  success  of the last  two  appeals  depended  on whether  Kedar Nath had title or not it is not necessary  to refer  to them at this stage. We shall deal with  the  other eleven appeals first.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 8  

   in  these appeals, plaintiffs and defendants 1 to 3  are common.   Plaintiffs are purchasers from the  mortgagees  of the suit 206 lands who had purchased the suit lands in an auction-sale in execution  of the mortgage decree.  Defendants 1 to  3  were the  former  owners  of  these  suit  lands  and  the  other defendants  were  either  purchasers  at  auction-sales   in execution of money decrees against the owners or transferees from the auction-purchasers.     The  suits concern plots formed out of two  Survey  Nos. 3384  and  3385.  It is thus that the other  two  suits  get connected  with the title suits because in those  suits  the rent  of certain plots from Survey No.. 3385  was  involved. The history of the plots is as follows :--     One  Laxmi  Narain  was the previous owner  of  these  2 Survey  Nos.   On his death his daughter’s sons  Ram  Narain Ram,  Sheonarain  Ram and Gopal Ram inherited  these  Survey Nos.  alongwith other properties.  The first two  sons  were defendants 1 to 2 in the suits and defendant 3 is the son of Sheonarain  Ram.  In 1930 the other two brothers sued  Gopal Ram for a partition. Preliminary decree was passed on  April 15,  1931 and the final decree on September 10, 1932.   Half share  in the property went to Gopal Ram and the other  half jointly to the other two brothers. The suit Survey Nos. came to the share of Ram Narain Ram and Sheonarain Ram.     On April 27, 1931 Ram Narain Ram executed a mortgage  of a  half  share in 27 plots made in the two Survey  Nos.  and some other property with Buxar Trading Co-operative Society. On  April  20, 1933, the Society released Ram  Narain  Ram’S share  in  the 27 plots from the mortgage  by  a  registered release  deed. On September 20, 1932 Sheonarain Ram filed  a suit for ’partition against Ram Narain Ram.  The preliminary decree  was  passed in May 1933, that is to say,  after  the release  by  the Society. The two brothers divided  the  two Survey Nos. half and half between them.  No final decree  in this partition suit seems to have been passed.     Devendra   Nath   (one  of  the   defendants)   obtained settlement  of 3 k 13 d of land out of Survey No. 3384  from Sheonarain Ram on June 10, 1933 and in execution of a  money decree  against Ram Narain Ram and Sheonarain Ram  purchased on August 13, 1934 the remaining portion of Survey No.  3384 and Survey No. 3385.  He obtained possession on February 27, 1935.   He had obtained attachment of the two  plots  before judgment,  on April 23, 1934. Devendra Nath disposed of 3  k 13  d  by settling them on his wife and she was one  of  the defendants  in the suits. Devendra Nath’s title  depends  on whet.her the release by the Society was valid and binding on the Society or not.  If the release was valid and binding on the  Society,  the  Society could not  obtain  a  decree  in respect of these two Survey Nos. and bring them to sale. 207 This  is  one  of  the points  for  consideration  in  these appeals.  The  High Court and the court below  have  decided unanimously that the release was binding on the Society  and Devendra Nath obtained no title.     On  April  26,  1934, that is to  say,  before  Devendra Nath’s  purchase  but after attachment by him,  the  Society applied  to  ,.he Registrar, Co-operative  Societies  for  a mortgage  award.   In  that application the  surety  of  Ram Narain  Ram  was also joined.  On August 16, 1934  a  money- award  was given against Ram Narain Ram and his surety.   On September  20,  1934  the money award was  cancelled  and  a preliminary  mortgage  award  was  passed.  Admittedly   the mortgage  award  had the force of a  mortgage  decree.   The

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 8  

final  mortgage  award was made on May 28, 1935.  The  award ordered sale of all .mortgage properties including the  half share  of  Ram Narain Ram in survey Nos. 3384 and  3385.  No mention  was made of the earlier release of the Survey  Nos. by  the Society by a registered deed.  In execution  of  the decree the Society purchased the two Survey Nos. on February 7, 1936 and obtained possession o.n July 20, 1937.     One  Dwarikanath had a money decree against the  Society and  he  attached the two disputed Survey Nos.  and  brought them to sale. The Buxar Central Co-operative Bank  purchased the  two  Survey Nos. in auction-sale on  February  8,  1940 obtaining possession on July 5, 1941.  On March 28, 1943 the Society  and  the Bank went into  liquidation.   The  right, title  and interest of the Society and the Bank was sold  by the  common Liquidator to Kedar Nath including the 27  plots made  in  the two Survey Nos. Kedar Nath’s purchase  was  on March  20, 1943 but he took the sale benami in the  name  of Dhanesar  Pandey,  who was plaint. ill No. 2  in  the  title suits while Kedarnath was plaintiff No. 1.  The title of the plaintiffs  Kedar Nath and Dhanesar Pandey is based on  this purchase.   After the release of the two Survey Nos. by  the Society,  Ram Narain Ram and Sheonarain Ram, and  after  his purchase,  Devendra  Nath, made settlement of the  plots  to various  persons.  They are the remaining defendants in  the suits and respondents in the various appeals before us.  The High Court has given a chart of these persons and the  dates of pattas but as nothing turns upon these details it is  not necessary to mention them here.     The plaintiffs (Kedar Nath and Dhanesar Pandey) in these title  suits asked for declaration of title and  possession. Their case was that the release was void and inoperative and not  binding on the Society.  Therefore, the mortgage  award and  the auction-sale was binding on Ram Narain Ram and  all those who derive title 208 from him.  Their next contention is that., in any event, the transfers  to  the  defendants  were  effected  during   the pendency of the mortgage award proceedings and were affected by the doctrine of lis pendens.  These two grounds were  not accepted  by the High Court and the courts below and  it  is these  two  grounds  which were urged  before  us  in  these appeals.   The other side seeks to avoid the effect  of  lis pendens by pleading that the mortgage award was claimed mala fide against the suit plots after their release and, in  any event,  there  was  attachment of  these  plots  before  the petition for the mortgage award was made.     Before we deal with these two points it may be mentioned at  once  that  neither  ground of  appeal  applies  to  the transfers by Sheonarain who was not a mortgagor and who  was not  affected by the release deed made by the Society.   Mr. C.B.  Aggarwal  frankly conceded that the  transfer  by  him could not be assailed and must stand. He, therefore, did not press Civil Appeals Nos. 1091, 1092, 1093 and 1094 of  1964. These appeals are accordingly dismissed with costs.     We may first consider whether the release was binding on the  Society  or  not.  When Ram Narain  Ram  mortgaged  the property to raise a loan from the Society of which he was  a member,  half  share in the plots belonged  to  him  because these  plots  had fallen in the preliminary decree  to.  the share  of  his  brother Sheonarain Ram  and  himself.   That preliminary  decree  was  passed on April 15,  193  1.   The Society  had  fixed a ceiling on the amount which  could  be borrowed, at Rs. 3000/-.  The mortgage deed recited that the amount   borrowed    was  Rs.   3000/-  with   interest   at Actually Rs. 1890/- were given as a loan.  The release deed,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 8  

releasing  the  suit plots was executed in  pursuance  of  a resolution of the Society (Res. No. 4 dated April 4,  1933). The release stated thus:                   "   ......  relinquished and released  the               properties, specified below, from the debt due               to  the  said  Ram Narain  Ram,  to  the  said               society,  entered in the  said mortgage  bond,               in favour of Ram Narain Ram  ....                   The said property shall not be made liable               for any debt of the said society nor shall any               incumbrance   be  recovered  from   the   said               property.   The  said property shall  come  in              possession  of  Ram Narain Ram.  The  said  Ram               Narain  Ram  shall  have  right  to  sell  the               property to keep the same in whatever ways  he               likes.  The said society neither has nor shall               have any objection thereto."               209 Why the release was granted by the Society was stated in the following words:                   "  ....  A petition was filed on behalf of               the said Ram Narain Ram in the meeting of  the               members in the presence of all the members  of               the  society for releasing some land from  the               said  mortgage in order to repay the debt.  of               Rs. 500/- forming part of the debt due by  the               said  Ram Narain Ram to the said  co-operative               society  which  was  put  up  before  all  the               members and accepted by them  ....  ". It appears that Ram Narain Ram did not pay the amount of Rs. 500/- to the Society and the Society considered itself  free to include these two plots, notwithstanding the release,  in their  application for an award decree.  In our opinion  the release  was  binding  on the  Society.   The  argument.  in opposition  to the binding nature of the release is that  it was  conditional on payment of Rs. 500/-.  This is no  true. No.  doubt the motive  for the  release was the  payment  of Rs. 500/- to the Society promised by Ram Narain Ram, but the payment was not made a condition of the release.  There  was no  attempt  to  release this amount from  Ram  Narain  Ram. Therefore, the release being absolute and unconditional  and by a registered deed must be treated as binding. It is  open to the promisee to waive the performance of any part of  the contract or to release any property from the operation of  a ’mortgage or charge.  If he wishes his rights to continue in the.  event of some condition simultaneously imposed on  the promisor, he must see that the release is made dependent  on the  performance  by  the  promisor  of  his  part  of   the agreement.   Here the Society merely released the two  plots without  making the payment a condition precedent,  and  the release operated.     That,  however,  is  not the end  of  the  matter.   The Society  filed on April 5, 1934 a petit.ion for  a  mortgage award   before   the   Assistant   Registrar,   Co-operative Societies.   The petition is headed ’Petition  for  mortgage decree’.  The petition mentioned that the mortgage was  made on  April  27,  1931 and that the  amount  secured  was  Rs. 3,000/-  with  interest at 121/2% per annum.   The  petition then described the property mortgaged and it included  plots Nos. 3385 and 3384.  The amount due on December 31, 1933 was said to be Rs. 2440/3.  The relief asked for was:                   "We  the  punches therefore  pray  that  a               decree  may be passed by your  honour  against               the  said member and he may be directed  under               the  decree  to pay the  debt,  principal  and

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 8  

             interest,  amounting to Rs. 2440/3/- within  3               months, that in case of non-payment this order               may  be passed that the entire amount  may  be               realized by               210               auction  sale  of the mortgaged  property  and               that  if the mortgaged property would  not  be               sufficient for the satisfaction of the  entire               amount  of  the  decree  the  punches  of  the               committee  be  allowed to pray for  passing  a               personal decree against the said member."     When  the Registrar made his order he overlooked that  a mortgage  award  had to be pass.ed.  On August 16,  1934  he ordered  that  an  award jointly with  sureties  be  issued. However,  on September 2, 1934, .he corrected  Iris  earlier order thus:                   "S1.  ’6.  Read  along  with  S1.  5.   By               mistake  of  the 2nd Asst.  simple  award  was               issued   instead  of  Mortgage  award.   Issue               mortgage award and ask the C.B. to return  the               simple award which will be cancelled here.               Sd. Syed Ozair.                        D.F.A.               Addl. A.R.          2-9-34." After  ’this  mortgage  award  which  had  the  force  of  a preliminary  decree,  the  Society  on  December  16,   1934 resolved  that a final mortgage decree be obtained from  the Assistant Registrar, and a final decree was obtained and the property  brought to sale on February 7, 1936 and  purchased by  the  Society  itself with the permission  of  the  court executing  the decree.  Possession was obtained on July  20, 1937.   Therefore,  litigation in respect of  this  mortgage remained pending from April 5, 1934 to July 20, 1937.  Under Explanation  to  s. 52 of the Transfer of Property  Act  the whole of this period denoted pendency of the proceeding  for purposes of application of the doctrine of lis pendens.     All  the  leases  made by Devendranath  were  after  the proceedings  commenced.   Devendranath purchased  the  right title   and interest of Ram Narain Ram on August  13,  1934. His  acquisition was prima facie hit by the doctrine of  lis pendens.  Three  arguments were advanced before us  to  meet this situation and we shall now deal with them seriatim.     The first argument is that there could be no lis pendens till  August 16, when the money award was issued  because  a money suit for proceeding cannot lead to the application  of the  doctrine of lis pendens.  As a proposition of  law  the argument is  sound but it is wrongly grounded on fact.   The proceeding was to get a mortgage award, the  equivalent of a mortgage decree.  The Court made a mistake and treated it as a  proceeding for a money decree.  When the court  corrected its,order,  the mortgage award related back to the  petition as made and the  whole of the proceeding must be treated  as covered  by the doctrine.  We cannot, therefore,  accede  to the suggestion that the doctrine did not apply; at any rate, on this suggested ground. 211     The  second  ground  of  attack  is  that   before   the proceedings  commenced before the Registrar these fields had been   attached  and,  therefore,  the   doctrine   of   lis pendens   again  cannot apply. We are unable to accept  this argument  either.   If the property  was  acquired  pendente lite,  the  acquirer  is  bound  by  the  decree  ultimately obtained   in  the  proceedings  pending  at  the  time   of acquisition.   This result is not avoided by reason  of  the earlier   attachment.   Attachment  of  property   is   only effective   in preventing alienation but it is not  intended

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 8  

to  create any title to the property. On the other hand,  s. 52  places a complete embargo on the transfer  of  immovable property  right  to which is directly  and  specifically  in question in a pending litigation.  Therefore the  attachment was  ineffective against the doctrine.  Authority  for  this clear position is hardly necessary but if one is desired  it will be found in Moti Lal v. Karrab-ul-Din and others(1).     Lastly  it  was  contended that the sale  was  by  court auction  and the doctrine of lis pendens would not apply  to such  a sale. This point was considered in  Samarendra  Nath Sinha and Anr. v. Krishna Kumar Nag(2) by one of us (Shelat, J.) and it was observed as follows :--                   "  ....  The purchaser pendente lite under               this doctrine is  bound by the  result of  the               litigation  on  the principle that  since  the               result  must bind the party to it so  it  must               bind  the person driving his right, title  and               interest from or through him.  This  principle               is  well illustrated in Radhamadhub     Holdar               v.  Monohar(3)  where the  facts  were  almost               similar to  those in the instant case.  It  is               true  that section 52 strictly  speaking  does               not  apply to involuntary alienations such  as               court  sales but it is well-established   that               he  principle of lis pendens applies  to  such               alienations.     (See   Nilkant   v.    Suresh               Chandra(4) and Moti Lal v. Karrab-ul-Din(1).’’ This ground also has no validity.     Lastly  it was argued that if the fields  were  released from  the operation of the mortgage they could not  be  made the, subject of a mortgage decree, and whatever was done  in the   mortgage proceedings was not of any consequence.   To. this there are two answers. Firstly, the  respondent  before the   Registrar  (Ram Narain Ram) made no objection to  ,the inclusion of the plots in the petition for a mortgage award. Secondly,  the doctrine of lis pendens applies  irrespective of  the  strength or  weakness of  the case on one  side  or other.   See  Gouri  Dutt Maharaj  v.   Sukur  Mohammed  and Ors.(5). There is, however, one condition that (1) 24 I.A. 170.         (3) 15 I.A. 97. (2) [1967] 2 S.C.R. 18.   (4) 12 I.A. 171. (5) 75 i.A. x65. 212 the  proceedings  must  be bona fide.  Here  no  doubt   the Society  knew  that  the plots had been  released  from  the mortgage,  but  it was also clear that the  release  was  to enable  Ram Narain Ram to dispose of some of the  plots  and pay Rs. 500/- to the Society. This amount was never paid and the  Society must have bona fide  felt that the plots  still remained encumbered.  In fact the attitude of Ram Narain Ram in  not  claiming  that  these plots  be  removed  from  the mortgage award shows that he too felt that this was the true position. In Gouri Dutt Maharaj’s(1) case referred to by us, it  was  said that if the proceedings were  bona  fide,  the applicability of s. 52 was not avoided.     For  the above  reasons we are clear that the   purchase by  Kedarnath was protected by the doctrine of lis  pendens, the  prior transfer to the defendants  notwithstanding.   In this  view  of  the matter the judgment of  the  High  Court cannot  be  sustained.   The  appeals  will,  therefore,  be allowed.  The judgment and decree of the High Court will  be set  aside  and the suits of the appellant will  be  decreed with costs throughout.  In this Court the  costs will be one set. R.K.P.S.                          Appeals allowed.

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 8  

(1) 75 X.A. 165 L 1 Sup./70--6-7-70- GIPF. 213